When resources like direct material, labor or time are scarce, the goal is to minimize the contribution margin per unit of scarce resource.

Question

Quizplus · Accepted Answer

The goal is actually to maximize the contribution margin per unit of scarce resource. This can be achieved by optimizing the production mix and allocating the scarce resource to the products or services with the highest contribution margin per unit of scarce resource.

When Resources Like Direct Material, Labor or Time Are Scarce